Final report of the Hearing Officer in Case COMP/M.3868 — Dong/Elsam/Energi E2 (pursuant to Article 15 of Commission Decision (2001/462/EC, ECSC) of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21 )
Date: 2006-02-21
Institutions: European Commission
Subjects: audit, economic concentration, electrical industry, gas industry, merger control

C 115/34

EN

Official Journal of the European Union

25.5.2007

Final report of the Hearing Officer in Case COMP/M.3868 — Dong/Elsam/Energi E2

(pursuant to Article 15 of Commission Decision (2001/462/EC, ECSC) of 23 May 2001 on the terms of reference of
Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21)

(2007/C 115/06)

The proposed concentration

On 13 September 2005, the Commission received a notification of a proposed concentration pursuant to
Article 4 of Council Regulation (EC) No 139/2004 (1) (‘the Merger Regulation’) whereby the Danish gas
incumbent DONG acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of two
important Danish power generators (Elsam in the West; Energi E2 in the East) and of two electricity distribu-
tion companies, namely København Energi and Frederiksberg Elnet (the latter four companies are hereinafter
referred to as ‘other involved parties’).

The initiation of proceedings and provision of key documents

At the end of the first phase of the investigation, the Commission concluded that the concentration raised
serious doubts as to its compatibility with the common market and with the EEA Agreement. On 18
October 2005, the Commission therefore initiated proceedings in accordance with Article 6(1)(c) of the
Merger Regulation.

On 7 November 2005 DONG was provided with access to the ‘key documents’ in the Commission file in
accordance with chapter 7.2. of the ‘Best Practices on the conduct of EC merger control proceedings’ (‘Best
Practices’), as determined by the Directorate General for Competition.

The Statement of Objections and the parties' reply

A Statement of Objections was sent to DONG on 19 December 2005. The other involved parties were
provided with a non-confidential version of these objections. In the following days, access to the Commis-
sion's file was granted. DONG was asked to reply by 9 January 2006. DONG and the other involved parties
submitted a joint reply on 5 January 2006.

In their reply of 5 January 2006, DONG considered that ‘their ability to respond to the Commission's
concerns in the SO had been undermined by the Commission's approach to the provision on access to file’.
More specifically, they stated that ‘the level of redaction of third party submissions was not satisfactory and
made it difficult for the parties to properly scrutinise or assess the documents’. By letter of 16 January
2006, I informed DONG that subsequent to Article 8 of Commission Decision 2001/462/EC, ECSC of 23
May 2001 on the terms of reference of hearing officers in certain competition proceedings (2), they were
entitled to lodge a reasoned request for access to file with me should they consider that they had not
received the information they were entitled to in order to prepare their defence. DONG has not reacted to
my letter.

Neither DONG, nor the other involved parties requested to develop their arguments in a formal oral
hearing.

The participation of a third party

Upon request, I admitted Naturgas Fyn Group as a third party according to Article 18(4) of Council Regu-
lation 139/2004 on 22 December 2005. They were sent a non-confidential version of the Statement of
Objections.

The commitments and the results of the market test

On 30 January 2006, DONG offered commitments. The results of the market test of these commitments
conducted as from 1 February 2006 were mixed. Concerns were raised in particular with regard to the effec-
tiveness of the two-step auction process provided for in the envisaged Gas Release Programme. As a result,
the commitments were amended. I have not been asked to verify the objectivity of the enquiry.

(1) OJ L 24, 29.1.2004, p. 1.
(2) OJ L 162, 19.6.2001, p. 21.

25.5.2007

EN

Official Journal of the European Union

C 115/35

The draft decision and the respect of the right to be heard

In the light of the commitments proposed and having analysed the results of the market test, the draft deci-
sion concludes that the proposed concentration is compatible with the common market and with the EEA
Agreement.

In the light of the above, I consider that the rights to be heard of all participants to the present proceeding
have been respected.

Brussels, 21 February 2006

Serge DURANDE